Despite challenges such as climate vulnerability, hunger, growing poverty, rising inequality, increasing unemployment, a low tax-to-GDP ratio, and political instability, Professor AK Enamul Haque, Director General of the Bangladesh Institute of Development Studies (BIDS), remains optimistic about the country’s socio-economic future. He views the population as the nation’s greatest asset but identifies the absence of a rule-based society as a significant barrier. In a recent interview with Shakhawat Hossain for New Age Business magazine, Dr. Enamul Haque emphasised that once the political government successfully establishes a rule-based society, the country will be poised for progress. He explained that a rule-based society, where standardised procedures replace personal relationships or individual discretion, is essential for tackling contemporary challenges.
Before the interim government could focus on crucial reforms after assuming power on 5 August 2024, following the ousting of the Awami League government amid a mass uprising, it had to remain occupied with addressing the demands of vested interests, said the BIDS DG.
Students, who had played a key role in the uprising and the formation of the interim government, were the first to demand an automatic pass in their examinations.
‘It is true that the interim administration was forced to accept the demand, but there is no harm in saying that the students caused the main damage,’ he said.
The interim government had to remain preoccupied with combating mob violence for almost a year, he added.
‘Had there been a political government, the mob violence over the past 18 months could not have taken place,’ he said, explaining that a political government would have had elements at every level to counter the activities of rivals.
The BIDS DG said the primary task of the newly elected government is to alleviate the daily hardships of the people, who have been enduring economic struggles and conflicts over the past several years.
‘Relief should not come solely in political terms but also in the form of economic activities,’ he added.
‘If there is no improvement on the economic front, poverty and unemployment will increase, and investment will remain sluggish,’ he continued.
Economic growth had fallen from 7.17 per cent in the financial year 2021-22 to 3.9 per cent in FY 2024-25.
A World Bank report, released in November 2025, indicated that nearly 62 million people — around one-third of the country’s population — remain vulnerable to falling back into poverty, in addition to 40 million already living below the poverty line.
Private sector credit growth dropped to 6.1 per cent in December, the lowest level in more than two decades.
Noting that investment does not necessarily mean only foreign capital, the BIDS DG said the government needs to increase domestic private investment before focusing on foreign direct investment.
‘To do this, the confidence of the people must be strengthened through reforms,’ he stated.
Reform of the economic rules is essential to clarify what can and cannot be done, he said.
Emphasising the importance of economic rules for maintaining transparency, he noted that such crucial regulations had been absent in the country for a long time.
He also pointed out that the documentation process for importing certain products was unclear, citing studies from newspaper reports.
‘If an importer collects 10 documents for importing a certain product, the government body facilitating the process will request another one,’ he said.
‘This is how corruption begins,’ observed the BIDS DG.
He called for the necessary documents required for conducting any kind of business to be made publicly available in a transparent manner.
Otherwise, only those close to the ruling party will be able to do business without hindrance, while those without the backing of the ruling party will be discouraged from engaging in business, he said.
Admitting that preparing such economic rules is a significant challenge for the new government, he said that without this reform, those willing to do business will remain confused.
Noting that this state of confusion is deliberately maintained by some state actors, he said they envied people who became self-reliant through transparent rules and regulations.
He said that investors needed to be encouraged to invest with simplified rules and regulations, without which job creation would be difficult.
‘Moving the economy forward will also be very difficult,’ he said.
The interim government has tried but failed to make progress in streamlining the economic rules.
‘Many reform initiatives had been taken but without much success,’ he said, lamenting the failure to make the one-stop service under the Bangladesh Investment Development Authority fully functional.
Calling the efforts to establish BIDA’s one-stop service a longstanding issue, he blamed the territorial and controlling mindset of ministries and divisions for the delays.
‘No matter how much the country’s economy faces ruination, bureaucrats will stick to their stances,’ he said.
‘This is a big problem for the economy as well as for the country,’ he added, stressing that it should be addressed.
‘Only a powerful political government can solve the problem,’ he said.
He said some policymakers in the interim government blamed bureaucratic complexity for the less-than-expected progress on reforms.
Supporting this view, he added, however, that all reforms could not be carried out from the chief adviser’s or the prime minister’s office.
Emphasising the need for decentralisation, he said the expertise of ministries and divisions could have been utilised to implement some of the reforms.
‘But that did not happen,’ he added.
Finding flaws in the current structure and the role of different ministries in supporting the growing manufacturing sector, he said the direct contribution of the Ministry of Industries to job generation was almost zero.
‘The Ministry of Industries is only concerned with government-owned industries,’ he explained.
‘But the country’s economic activities are no longer limited as they were in the 1980s,’ he continued, adding that the absence of a ministry dedicated to the manufacturing sector should be reconsidered.
According to the Bangladesh Bureau of Statistics, the contribution of the manufacturing sector to the economy has risen to around 36 per cent, up from about 10 per cent in the 1980s.
Evaluating economic management under the interim government, the BIDS DG said that the exchange rate had been stabilised and foreign currency reserves increased.
He blamed the previous political regime, the Awami League, for the sharp decline in foreign currency reserves and exchange rate instability, saying that capital flight had reduced the reserves by more than half during the last two years of the AL’s long 15-year rule.
From over $48 billion in August 2021, the reserves plunged to around $20 billion towards the end of the Awami League (AL) regime.
The BIDS DG said that the suppression of the devaluation of the local currency, the Taka, against the US dollar by the AL since 2018-19 largely benefited those involved in capital flight.
‘Money smugglers were able to purchase dollars cheaply because of the suppressed exchange rate,’ he said.
He also found a link between capital flight and the current liquidity crisis in some local banks, explaining that the Taka used to buy dollars did not return to the banks.
‘Maybe those funds were used to buy gold or were kept at home,’ he speculated, adding that the liquidity crunch revealed that the loss of trust in the banking sector could not be addressed.
‘Trust of depositors is the key to banks, and if it is lost, even a bank like Standard Chartered will collapse. All depositors will rush to withdraw their funds,’ added the BIDS DG.
The BIDS DG praised the Bangladesh Bank’s performance in boosting the gross foreign currency reserves to $34 billion as of 9 February, thanks to a good inflow of remittances and the central bank’s dollar-buying spree.
However, he criticised the central bank for appointing administrators in struggling banks, arguing that administrators, who are essentially regulators, are incapable of improving the performance of those banks.
‘To me, bankers should be given the responsibility to address the problems of the bank so that they can be held accountable for the mismanagement of struggling banks,’ he said.
He suggested that the witch hunt should be stopped.
‘Suspecting someone of corruption is one thing, but arresting them requires a warrant. Yet, in the case of checking someone’s bank accounts, the government does not need a warrant,’ the BIDS DG pointed out.
He called this a bad precedent, saying it would discourage investment, as investors would view the country as risky and fear being trapped after investing.
While he acknowledged that the formalisation of economic activities is beneficial for many reasons, including revenue generation, the senior economist expressed concern about the potential harassment of people by bureaucrats under the guise of enforcing rules.
‘I support easier economic norms so that people will willingly accept the formalisation of economic activities,’ he said.
Describing most people in the country as hardworking, honest, and patriotic, he said the country would grow as long as population growth remained stable.
‘Production activities for food and clothing will not slow down,’ he stated.
He said he never worried about the country’s population growth, especially in the capital city of Dhaka, which, according to the United Nations’ ‘World Urbanization Prospects 2025’ report, is projected to become the most populous city in the world by 2050.
Dhaka has been ranked at the bottom of the list of cities with the worst air quality, classified as unhealthy, according to the air quality and pollution city rankings.
The BIDS DG attributed the growing air pollution to the presence of old and outdated cars, alongside the absence of a mass transportation system.
Taxation on cars is so high in the country that people are discouraged from replacing their old vehicles, he said.
Comparing the population density of Sutrapur and Kotowali thanas with that of Uttara thana in the capital, he said the population of the first two thanas was ten times higher than that of the latter.
But this did not make a significant difference in air pollution levels in those areas, he said, adding that numbers were crucial in every aspect of life, but they were simply missing.
He explained how numbers were lacking in the planning of public projects by comparing the width of footpaths between Gulshan and Mohammadpur.
The width of footpaths is more than five feet in Gulshan, where the majority of people walk less and drive cars. In contrast, in Mohammadpur, where the majority of people walk, they do so on narrow footpaths or even on roads with no footpaths, according to the BIDS DG.
Calculating that 80,000 people walk on every kilometre of city streets, he asked whether they had adequate walking space.
‘It is not, that should be the answer,’ he said, adding that people walking in the middle of the road due to the lack of footpaths should not be blamed.
‘It is the system that should be blamed,’ he said.
Referring to a study, he said that around 80,000 people crossed the New Market intersection every hour amid chaotic traffic, with no systematic planning in place, leaving town planners clueless regarding numbers.
Stressing the need for substantial investment to build infrastructure that facilitates services to the people and improves the economy, he said the government still needed foreign loans despite the growing debt burden.
Fear of external debt has been created because of the misuse of loans, he said, adding that the loans were not invested in viable projects.
‘Money had flowed into the sky and been used for buying properties in London, Dubai, and Canada,’ he said, making an indirect reference to the buying spree of property by Saifuzzaman Chowdhury, an Awami League politician and former land minister.
Some 350 properties owned by the controversial former minister in London and various cities in southeast England have been frozen and put up for auction by the United Kingdom’s National Crime Agency, following requests from the Bangladesh interim government to seize illegal assets owned by Saifuzzaman.
The country’s economy bore the brunt of mismanagement and the autocratic rule of the ousted Awami League (AL). However, this could have been avoided had there been a rule-based society.
Giving the example of South Korea, whose economic condition in 1965 was almost identical to that of Bangladesh, he noted that the transformation to a rule-based society helped South Korea achieve sustainable economic progress within five years.
In Bangladesh, the move towards a rule-based society should begin, even though it may not be welcomed by many, he said, adding that some may prefer the newly elected government to address the problem in its own way.
‘But that will not work anymore. It will be a mob-based society,’ he said.
The BIDS DG stated that rule-based economic activities would strengthen the country’s transition from its current status as a least developed country (LDC) to a developing one.
In 1975, Bangladesh was included in the LDC group created by the UN to facilitate duty- and quota-free trade with developed and developing nations.
The Committee for Development Policy, a UN body dealing with LDCs, set 24 November 2026 as the final day for Bangladesh’s LDC status after the country met all three UN criteria — Gross National Income (GNI), the Human Assets Index, and the Economic Vulnerability Index — through two consecutive reviews for graduation.
However, trade bodies, citing a lack of preparedness, have been pressuring successive governments for a three-year deferral.
The new BNP-led government has also appealed to the designated UN body to defer the graduation until 24 November 2029.
The BIDS DG stated that trade bodies had feared disaster for the apparel sector following the phasing out of the Multi-Fibre Agreement in 2004.
‘But the export growth of the apparel sector surged that year,’ he said.
